Trade spill-overs of fiscal policy in the European Union: a panel analysis

Fiscal policy, profits, and investment

Roel Beetsma, Massimo Giuliodori () and Franc Klaassen

Economic Policy, 2006, vol. 21, issue 48, 640-687

Abstract: We explore international spill-overs from fiscal policy shocks via trade in Europe. To assess and quantify the channels through which a fiscal expansion stimulates domestic activity, foreign exports, and foreign output, we estimate a dynamic empirical model of government spending, net taxes, and output, and combine its estimates with a panel model of trade linkages across European countries. The baseline estimates of both models are quite robust and statistically significant. Our results indicate that trade spill-overs of fiscal shocks should be taken into account when assessing the character and intensity of economic integration in the European Union.— Roel Beetsma, Massimo Giuliodori and Franc Klaassen

Date: 2006
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Related works:
Working Paper: Trade Spillovers of Fiscal Policy in the European Union: A Panel Analysis (2005)
Working Paper: Trade Spillovers of Fiscal Policy in the European Union: A Panel Analysis (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:oup:ecpoli:v:21:y:2006:i:48:p:640-687.

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